60+ acquisitions, little debt and why success have no rules (so do your thing!)

How young, smart people with no rules build great businesses:

- Acquiring $2–17mm EBITDA traditional companies

- Immigrant founder family office

- Raising tens of millions to back independent sponsors

- Water/waste utility services

-Equipment finance for blue-collar rollups

-Credit + co-invest for indie buyers

- Local “Main Street” buyout fund

-Carve-out specialist for <$50mm EV “corporate orphans”

- Fire safety services platform

- Vertical SaaS + services hybrids

- Owner-operator continuity fund

- Landscaping B2B focus

- Working capital fund for Amazon/retail wholesalers

- Wealth platform for athletes/creators

- Diligence-as-a-service (<$25mm deals)

- Niche manufacturing holdco

- Secondary LP interests micro-fund

- Route-based services roll-up

- Operator and investor match network

No matter what one builds, it is important to understand that there are literally no rules for success.

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If you’re buying a small business or want to back someone who is, you need to know about CapitalPad.

They’ve built a marketplace for acquisition entrepreneurs and the investors who back them.

They handle the messy part:

1. standardized terms,

2. governance,

3. and distributions

In short, they professionalize investing in small businesses.

It’s founded by two gentleman (Travis and Donza), a phenomenal entrepreneur who’s been on both sides of acquisitions.

So if you’re raising to buy a business—or you want exposure to acquisition deals, go to CapitalPad.com and tell them PrivateEquityGuy sent you. That’s CapitalPad.com

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Earlier this year, I met a guy in his 30s who worked at a family office/hedge fund and had always wanted to own a traditional business.

Great to see his dream become a reality. He acquired a very niche manufacturing business that sold value-added rubber parts for industrial vehicles.

They serve B2B, B2C, and B2G customers, with recurring but seasonal revenue.

The company’s revenue was below $5 million, but margins were good.

Now the interesting part:

There was no sales team or marketing effort when he bought the firm. Completely based on word of mouth and reputation.

Great news for searchers:

Opportunities like this always exist; he has been able to grow topline by 10% simply by reaching out to potential new customers (some of whom have converted into sales).

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The last five years have shown that Europe’s ETA scene is growing fast — but most people still miss the real stories.

Every week, ETA Europe curates new acquisitions, completed fundraises, deep dives, and market shifts.

From operators raising search funds to investors backing deals, they cover it all.

If you want the inside track on ETA in Europe, this is where to start.

(And Chris, the man behind this, being built and sold a company worth 100s of millions, is coming to the podcast very soon!)

Till then, subscribe for free today (you’ll, again, get to see the deals they invest in too).

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I talked to a lady who had an engineering background, but she grew a manufacturing business from $15mm to around $200mm in 10 years.

1. Mostly through M&A

2. With very little debt

They didn’t do it in New York, Los Angeles, or Chicago, but in a small town with 4,000 people.

Eventually, they hired ca 750 people. Imagine the community they built.

(And she will be also coming to the podcast very soon.)

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What type of people should you hire for your business?

Here's a great read from a gentleman who employs ca 250 people:

(1)  Look for people who are loyal - people stick around at a company for a while because they’re willing to put in the time and energy that’s needed and willing to make that commitment.

(2)  Look for people who don’t want to be entrepreneurs - people who are entrepreneurs aren’t meant to go work out of business for the rest of their lives. It’s very hard to convince them to do it.

(3)  Look for people who have been in a vertical for a long time - they have relationships with potential customers, banks, relations with other key employees.

(4)  Look for people who are great leaders - once they join your company they’ll bring other people with them because they’re a great leader and people really value their opinion.

(5)  Look for amazing managers - people who understand systems and processes, and know how to lead.

(6)  Look for people who believe work is life - yes, having a great balance in life is important, but if people love what they are doing and they’re willing to put in more than 50, 60 a week, you’re more likely to succeed. If someone believes ‘oh, the work week should be 9-5 and it ends there…’ you’re not gonna beat your competition.

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“Business is the greatest sport ever, it’s never ending. The scoreboard is always getting harder and harder to score on. So it takes a great team to run and build it.”

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Private equity, like everything else, is a business of people and trust.

Hearing industry legends say that some of their best LPs said no to two funds before they finally came in.

So what is the right mindset here?

I believe it's, “You just haven’t seen enough of me to make a decision.”

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I believe most all great private equity firms, VCs, fund of funds, asset management firms, holdcos, etc., are built on great partnerships.

It doesn’t need to be a friendship, but it has to be a great partnership. Mutual respect.

Team members being proud to have each other… “I couldn’t do it without him or her.”

You see the true essence of it when you ask one to describe the other. And vice versa.

Yin and yang: people with different backgrounds, views, and strengths…

Coming together… all willing to run through walls.

I’ve seen these successful partnerships so many times because I’ve met and talked to hundreds of them. Profitable firms with histories longer than 10 years.

A great partnership is often THE secret to long-term success.

Just imagine a person building something they find extremely exciting, something they truly enjoy. All they think of is work. Work becomes fun.

Now add great people, great partnerships, and 10+ years of focused work without messing up...

How do you keep up with teams like that?

You don’t…

Now go find these special people.

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Probably the two most different business owners I’ve seen are two gentlemen in their 50s; they started a finance company 25 years ago. Today they’re doing $4.2m per month NET. Each owns 50% of the firm.

One is an introvert, living in the middle of nowhere with eight kids. The other prefers a place in the city. Lots of noise, lots of events, very outgoing. They meet once a month but talk weekly. Very different people, each with different roles, but together truly invincible.

Oh, and after reading their nine-month report, the ROE is 13.9% and net profit growth is +10% YoY.

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A few guiding principles for a new CEO’s 1st year at an acquired company (from a seasoned search fund investor Tim Ludwig):

1.  Do no harm. You (or the investors) bought a good business. Don’t mess it up.

2.  Look for low-hanging fruit, especially things that will make a positive impact on team morale. Can be as simple as fixing an annoying broken light above someone’s desk

3.  Learn the business. Spend time with employees, customers, vendors, the seller, your board, etc

4.  Develop a 1st cut of KPIs and a system to update them regularly

5.  Understand how cash moves through the business and how to understand your financials

6.  Identify gaps and weaknesses (people, tech, processes, etc.) and develop a plan to address them with your team.

I spent the last weekend studying Tim and his investment strategies. He has backed 60+ CEOs and bought companies himself.

14-15 hours of research turned into a value-backed 27 minutes:

• what industries excite him as a search fund

• what makes a great operator

• how search funds work

• how deals actually close

I hope you learn a lot!

Here are the links to Spotify, Apple Podcasts and YouTube.

That’s all for today.

Thanks a lot for reading and I’ll talk to you again next week.

Take care,

PrivateEquityGuy / Mikk Markus